Amex cuts the value of its rewards cards but still beats the big banks in value

Kelly Emmerton

15 Nov 2018

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American Express, long the favourite for spenders chasing big rewards points balances, has today announced decreases across the earn rates of many cards in its rewards card range. But if you’re ready to trade in your Amex card, don’t be too hasty - amongst a trend of slipping rewards programs, it may still be one of the best value cards around.

Mozo data shows that rewards value has been steadily declining for the last two years, since the RBA made changes to interchange fees charged on credit cards. And Amex is just the latest in a long string of card providers making changes to rewards.

“There has been a lot of change in the rewards credit card market this year and with Amex now signalling an overhaul of its program, many people will be wondering how best to extract value from their card,” says Mozo Director Kirsty Lamont.

“While Amex card holders will see a decline in the value of the points they can earn from April next year, the good news our analysis shows their cards will still outperform the big four banks when it comes to delivering gift cards and flights.”

Mozo data shows that the average net value of an American Express card will fall 27% from its 2016 value when the changes come into effect next April - significantly less than the 89% average fall over the past two years suffered by the big four banks.

Average rewards net value across all rewards cards

You might be wondering what exactly that means when it comes to earning and redeeming rewards points on your American Express plastic. The answer is that you’ll need to spend more to get the same rewards - but Amex customers will still spend considerably less than big bank customers.

Even taking into account the changes to American Express’ points value and earn rates, Amex cardholders are still looking at a spend of $5,516 less than a big bank customer when it comes to a gift card, or $3,639 less for a free flight, on average.

How do Amex spends stack up against the big 4 banks?

“Although these are quite significant changes, it’s clear Amex still offers one of the best value rewards cards when compared to the big four banks. So if you love rewards, it’s worth doing your research to understand how much you’ll now have to spend on your card to earn a gift card or a flight,” Lamont said.

Changes to American Express rewards cards - effective 15 April 2019

So what exactly has changed? Here’s the nitty gritty of it.

The Amex Explorer Card, Platinum Edge Card and Essential Credit Card, which earn points in American Express’s own rewards program, emerged unscathed from the changes, but other airline cards in the American Express lineup dropped a quarter of a point per $1 spent.

How many points per $1 does an Amex card earn now?

The big change for the value of American Express rewards cards was not actually the earn rate, but the redemption value of the points earnt. For example, snagging a $100 gift card will now require 20,000 points to be redeemed, up from the previous 13,500.

For those converting to airline points, 1 point earnt on an American Express card can now be redeemed for 0.5 Velocity points, down from 1 Velocity point on the Platinum Edge Card and 0.75 Velocity points on the Essential and Explorer cards.

How much do you need to spend on American Express for a $100 gift card or domestic flight after April 15?

“These changes might come as a shock to the system, but when you look at the big picture, American Express cards are on the whole still really great value,” said Mozo Director Kirsty Lamont.

Key to getting top value from your rewards credit card is finding the piece of plastic that fits your spending style. You can check out the Mozo Rewards Revealer to find your match, or take a look at some rewards card options below.

*Rewards net value is derived by calculating the number of points earned based on an annual spend of $20,000, then calculating how many Syd-Mel one-way flights can be redeemed using the points earned. An assumed flight cost was used and the annual fee deducted to arrive at a rewards net value.

Hot rewards cards 2018 - rates updated daily

  • Promoted

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    Qantas Money Qantas Premier Platinum

    Receive 70,000 bonus Qantas Points when you spend $3,500 within 90 days of card approval, and an additional 30,000 bonus points after the first anniversary of the card. $299 per year. Special Offer- $149 annual fee for the first year, offer ends 30 April 2019.

    Qantas Frequent Flyer

    $299 $149 in the first year

    100,000

    1 point up to $10,000/month, then
    0.5 points uncapped

    • -

    • 19.99% p.a.

    • 0% p.a. for 18 months and then 21.99% p.a.

    • 21.99% p.a.

    • 55

    • 3.00%

    • $30.00

    • 1 point per dollar on Mastercard, up to $10,000 per month, then
      0.5 points per dollar on Mastercard, uncapped

    • Never

    • 100,000

    • 8,000 points

    • 120,000 points

    • 17,120 points

    • • Concierge

      • Travel Insurance

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    Woolworths Everyday Platinum Credit Card

    Perfect for practical spenders, pay no annual fee in the first year and save up to $50 on your Woolies shop each month. Plus new cardholders can score a $50 Woolies eGift Card when you spend $150 a month for the first 3 months. Too easy!

    Woolworths Shopping Cards

    $49 $0 in the first year

    No current offer

    1 point uncapped

    • -

    • 19.99% p.a.

    • 0% p.a. for 14 months and then 21.99% p.a.

    • 21.99% p.a.

    • 55

    • 3.00%

    • $35.00

    • 1 point per dollar on Visa, uncapped

    • Never

    • No current offer

    • -

    • -

    • 20,000 points

    • • Concierge

      • Purchase Protection

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    American Express Qantas Ultimate Card

    Receive a whopping 100,000 bonus Qantas Points when you apply online by 6 May 2019, are approved, and spend $3,000 on your new Card within the first 3 months. This offer is available to new Card Members only. For eligibility, simply earn above $65,000 and have a good credit score. Credit Card Provider of the Year in the Mozo Experts Choice Awards 2018.^

    Qantas Frequent Flyer

    $450

    100,000

    1.25 points uncapped

    • -

    • 20.74% p.a.

    • 0% p.a. for 12 months and then 20.74% p.a. (1.00% balance transfer fee)

    • 44

    • 3.00%

    • $30.00

    • 1.25 points per dollar on Amex, uncapped

    • Never

    • 100,000

    • 8,000 points

    • 120,000 points

    • 17,120 points

    • • Travel Insurance

      • Purchase Protection

      • Account alerts by SMS

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    ANZ Frequent Flyer Black

    Snap this one up and score 100,000 Bonus Qantas Points and $200 cashback to your new card by spending $4,000 in the first 3 months. Winner Mozo Expert Choice Award 2018 - Premium Card Benefits.^

    Qantas Frequent Flyer

    $425

    100,000

    1 point up to $7,500/month, then
    0.5 points uncapped

    • -

    • 19.99% p.a.

    • No current offer

    • 21.49% p.a.

    • 55

    • 3.00%

    • $20.00

    • 1 point per dollar on Visa, up to $7,500 per month, then
      0.5 points per dollar on Visa, uncapped

    • Never

    • 100,000

    • 8,000 points

    • 120,000 points

    • 17,120 points

    • • Concierge

      • Travel Insurance

      • Extended Warranty

      • Purchase Protection

      • Rental Car Excess Cover

      • Guaranteed Pricing

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    Virgin Money Virgin Australia Velocity Flyer Card - Purchase Rate and Balance Transfer Offer

    Receive a $129 Virgin Australia gift voucher each year. 0.0% p.a. on purchases for up to 14 months.

    Velocity Frequent Flyer

    $129 $64 in the first year

    No current offer

    0.66 points up to $1,500/month, then
    0.5 points uncapped

    • 0% p.a. for 14 months

    • 20.74% p.a.

    • 0% p.a. for 6 months and then 20.99% p.a.

    • 20.99% p.a.

    • 44

    • 3.30%

    • $10.00

    • 0.66 points per dollar on Visa, up to $1,500 per month, then
      0.5 points per dollar on Visa, uncapped

    • Never

    • No current offer

    • 7,800 points

    • 119,600 points

    • 19,500 points

    • • Concierge

      • Guaranteed Pricing

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